Bloomberg New Energy Finance - Week In Review

This Week In Review was sent on Tuesday 3 June.

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CHINA LURES INVESTORS TO RENEWABLES, BLOW FOR US DEMAND RESPONSE

China’s National Development and Reform Commission published a document in mid-May, detailing 80 infrastructure projects in which the government is encouraging private investment. More than half are energy-related with some 35 in renewable generation.

The statement says “encourage society to invest” in these projects. "Society" is taken to mean private investors including both domestic and foreign.

Among the 35 renewable generation projects are three hydro plants, two large-scale wind bases and “30 distributed-scope PV project demonstration zones” totalling 3GW. Some 10 others are oil and gas related projects including crude oil and natural gas pipelines, liquefied natural gas (LNG) terminals and underground gas storage facilities as well as other gas engineering projects.

Although it is not yet clear why these projects have been specifically mentioned, Bloomberg New Energy Finance believes this could represent near-term priorities for the government. The statement itself, however, suggests that China could see a further opening of its energy and infrastructure sector with this announcement.

A Bloomberg New Energy Finance Analyst Reaction titled “Wanted: private investors for Chinese energy projects”, published on 28 May, looks at the announcement in detail and the next steps.

Over in the US, the  demand response industry was dealt a blow at the end of May when the US Court of Appeals in Washington, DC annulled the Federal Energy Regulatory Commission’s Order 745, on the basis that FERC did not have jurisdiction to impose it.  

The demand-response programme was a top priority for former FERC chairman Jon Wellinghoff, who pushed through a number of energy efficiency and renewable energy initiatives.

FERC’s Order 745, first approved in 2012, called for grid operators to pay the full market price to economic demand response resources in real-time and day-ahead markets as long as dispatching that capacity is cost-effective. The ruling found that FERC overstepped its jurisdiction and that the decision on payments should lie with states.

The ruling by a panel of three judges of the US Court of Appeals for the District of Columbia Circuit throws into question the future of this widely-used programme, in which parties like EnerNOC provide demand-response services to regional grid operators in wholesale electricity markets and share the savings with large electricity users such as Wal-Mart Stores.

In an interview with Bloomberg BNA on 23 May, FERC commissioner Philip Moeller said that it would take the commission some time to figure out what the next steps should be. “My main motivation was the overcompensation,” Moeller said. “My concern was that by pushing too hard, the jurisdictional aspect would be called into question.”

Earlier, in February, the US demand response market was badly hit by another FERC ruling, this time related to the PJM market in northeastern states. FERC approved a request to limit the amount of demand response capacity PJM procures under its Limited and Extended Summer contracts to about 10% of PJM’s reliability requirement.

The impact of these rulings is examined in an Analyst Reaction “Bad news doubles for US demand response providers”, published on 30 May. 

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Bloomberg New Energy Finance estimates only 49m smart gas meters by 2020 against 185m for electricity

Bloomberg New Energy Finance estimates only 49m smart gas meters by 2020 against 185m for electricity
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Q&A of the Week

Campbell heats up green energy plans

Campbell Soup hopes about a third of the electricity powering the machines that cook signature products like its chicken noodle soup will be sourced from renewable energy within two years.

Currently, about 8-12% of the power consumed by Campbell comes from renewables, depending on whether projects like its biogas digester and solar arrays are running at full capacity, Dave Stangis, vice president of corporate sustainability, said.

Renewables’ share of the company’s electricity use will increase to more than 30% by end of July 2016, assuming several more projects come online, he said. Camden, New Jersey-based Campbell has a working agreement with a development company to install solar panels at five locations, wind turbines at three sites and two new digester/generator projects.

Stangis said the company’s 'sustainability super star' is its Napoleon, Ohio soup plant. Campbell partnered with CH4 Biogas to build, across the street from the facility, Ohio’s first commercial biogas power plant, which went live at the end of last year.

'The biogas digester is a win-win-win across the board,' Stangis said. 'Not only is that going to help our renewable [goals], it runs 24 hours a day, unlike solar. It accepts waste from us, so our waste recycling rate at that plant will go up to 95 percent. It also accepts waste from local farmers and other food producers.'

The biogas power plant is adjacent to a 60-acre, 9.8MW solar system constructed by BNB Renewable Energy Holdings for Campbell in 2011. This already provides 15% of power for Campbell’s Napoleon facility.

Q: You are thinking a lot about onsite renewable energy. Yet, some food manufacturers I have spoken with have said that their operations represent just a small part of their overall carbon footprint, suggesting that investing in renewable energy isn’t a top priority for their sustainability agenda. Your response?

A: Even though our manufacturing footprint may be smaller than our agricultural footprint...

This is an excerpt from the Clean Energy & Carbon Brief published weekly. To subscribe to the Clean Energy & Carbon Brief, click here.

 

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